The Secret, Shadowy World Of AMA Price Fixing In The US

How the AMA secretly sets prices for health care in the US.

The Specialty Society Relative Value Scale Update Committee (or RUC, pronounced “ruck”) is a committee of the American Medical Association (AMA) that meets in secret to divvy up roughly $85 billion in U.S. taxpayer money every year. Of course that's just to get started. Because of the way the system is set up, the "values" the RUC comes up with wind up shaping the very structure of the U.S. health care sector, creating the perverse financial incentives that dictate how U.S. doctors behave, and affecting the annual expenditure of nearly one-fifth of the United State's GDP, $2.7 trillion dollars.

Is there anyone who really thinks that this is a good system?

From this article from Washington Monthly

While these doctors always discuss the “value” of each procedure in terms of the amount of time, work, and overhead required of them to perform it, the implication of that “value” is not lost on anyone in the room: they are, essentially, haggling over what their own salaries should be. “No one ever says the word ‘price,’ ” a doctor on the committee told me after the April meeting. “But yeah, everyone knows we’re talking about money.”

That doctor spoke to me on condition of anonymity in part because all the committee members, as well as more than a hundred or so of their advisers and consultants, are required before each meeting to sign what was described to me as a “draconian” nondisclosure agreement. They are not allowed to talk about the specifics of what is discussed, and they are not allowed to remove any of the literature handed out behind those double doors. Neither the minutes nor the surveys they use to arrive at their decisions are ever published, and the meetings, which last about five days each time, are always closed to both the public and the press. After that meeting in April, there was not so much as a single headline, not in any major newspaper, not even on the wonkiest of the TV shows, announcing that it had taken place at all.

In a free market society, there’s a name for this kind of thing—for when a roomful of professionals from the same trade meet behind closed doors to agree on how much their services should be worth. It’s called price-fixing. And in any other industry, it’s illegal—grounds for a federal investigation into antitrust abuse, at the least.

and this about why the AMA want's to control this:

The first boon is that, in order to be on the RUC, specialty societies must become dues-paying members. At a time when the AMA has struggled against being overshadowed by specialty societies, controlling the RUC prevents what might otherwise be a rapid exodus of membership. As one RUC member told me bluntly, “No one cares about AMA. They care about the RUC.” And that’s a lucky break for the AMA. In 2012, dues collection actually increased by 3 percent, topping out at $38.6 million for the year. Cha-ching.

The second boon for the AMA is that by controlling the RUC, it controls much of the source code that our health care system uses to operate. Every single one of those roughly 9,000 medical services and procedures has its own five-digit code, known as current procedural terminology (CPT), and the AMA owns them all. That means that anyone—physicians, labs, hospitals, you name it—who wants to bill Medicare, Medicaid, or a private insurance company has to purchase either AMA books and products, or products from other software companies that pay AMA royalties and licensing fees to use the CPT codes. According to its annual report, in 2012 the AMA made $83.1 million in “royalties and credentialing products,” a large chunk of which comes from licensing CPT. Again: cha-ching.

And that’s just the monetary stuff. The third boon—the real power curve—is the fact that the AMA’s control of the RUC makes it indispensible to everyone and everything in a $2.7 trillion health care industry. That includes specialty societies, primary care organizations, and medical device and pharmaceutical companies—all of whom have something big to gain or lose from the RUC’s decisions.

Snide and snarky comments welcome in moderation if you're in the US. Better ideas from outside of the US even more welcome.

American Board Of Laser Surgery

I get a lot of questions from laser physicians about the American Board of Laser Surgery. I thought I would leave a short post about the benefits of becoming a diplomat of the ABLS. It is the only recognized specialty board specifically for laser surgery. We have members from many countries because most other countries do not have a laser board. It is like any other board certification with a written and oral exam.  Through the process, the practitioner will gain extensive knowledge about laser procedures, safety, theory, physics, and other information. Feel free to ask me any questions about it! 

Hospital Administrators Are Not Always Honest

Hospital administrators have an agenda that's not always aligned with yours.

I used to do emergency work at a hospital in a large chain. It was hardy profitable and became less so over time. When I moved an hour away I sought to limit my emergency exposure for obvious reasons. The hospital administration cited sections of the Bylaws and Rules and Regulations that mandated that surgical specialists take call. This was specified for Plastic Surgery and Orthopedics.

Later and entirely by accident, I found out that the Orthopedists were being paid to take this emergency call by the same administration that was citing those hospital documents. Essentially they were being paid to take call from 15 minutes away whereas I was required to take call for free from four times the distance. Needless to say I dropped that hospital after briefly entertaining legal action. So soon after my divorce I hardly wanted to enrich another attorney. They are much smarter about getting paid than physicians are. I did inform a contact at the local newspaper who passed on the story stating that the public doesn't really care if a doctor gets screwed over. I found that a bit amusing.

As the story evolved I extended my practice up the street not so far away and something similar almost happened again. This time the administration in my new acute care hospital sought to get into an arrangement with me to take call. They were very quick to stipulate that this arrangement was to be secret. It was to involve some kind of payment from the hospital. The thought left a bad taste in my mouth. Emergency call is a loser. I just stopped taking it.

The moral of this story is that you should not expect hospital administrators to be honorable people. Entering into any kind of business arrangement with them especially a secret one is liable to be unfair, unjust or just plain illegal. You might want to avoid that.

Let Loose On LinkedIn

Like all the social media sites, slapping up a profile on LinkedIn and then playing "sit and wait" won't get you very far with your networking or marketing needs... which is why, in addition to the forums and comments on Medical Spa MD, you have the easy task of joining the Medspa MD LinkedIn group.

One thing that we try to be very careful with is who we let inside our group so that we don't get spammers or salespeople who are just trying to market. In fact, we look at every single person asking to join and we kick out people who violate our terms.

I'll Be Speaking At The Medical Fusion Conference, Nov 11-13

Medical Fusion Conference

I'll be speaking (twice) at the non-clincal Medical Fusion Conference on November 11-13th in Las Vegas.

The Medical Fusion Conference is a unique event that allows clinical physicians the opportunity to learn about unique niches where they can apply their clinical knowledge and gain real control of your income and lifestyle. (Isn't that why most docs are in cosmetic medicine in the first place?)

I've been to a lot of aesthetic and cosmetic conferences and trade shows, but this conference is different. I went to it last year and the result was that we launched Freelance MD!

Medical Fusion is purposely small. It allows you to sit down (multiple times) with any or all of the speakers and pick their brains. (If you've been to any of the big conferences you know that a the end of a talk or session there's a pack of people around the speaker for ten minutes and that's about it. Not at Medical Fusion.)

Who is Medical Fusion for?

Any physician who wants more control of their income, career, and lifestyle.

  • A plastic surgeon who want's to learn how to invest in real estate.
  • An internal medicine doc who want's to retire and write a book.
  • A dermatologist who want's to leave clinical practice and consult to big pharma.
  • A family practitioner who want's to leave Medicare and Medicate and start a concierge practice.
  • A surgeon who want's to make sure his retirement is secure.
  • An ER doc who want's to travel and work internationally.
  • A Pediatrician who want's to publish a children's book.
  • A cosmetic surgeon who's ready to grow his cosmetic practice or medical spa.  ; )
  • Any doctor who's thinking of leaving clinical practice.
  • Any doctor who want's to spend more time with your family and kids.
  • Any doctor who's looking to increase their income.
  • Any doctor who's looking for a change.

And that's just a part. In short, if you're a physician who want's to take control of your life, this is the conference for you.

Read what other physicians are saying about the Medical Fusion Conference

I'll be speaking on two topics; how to start/add/run and grow a cosmetic practice, and how to use online technologies to make money as a physician.

There will also be speakers on personal finance, investing, product development, and a bunch of other stuff including concierge medicine which a lot of you have expressed interest in. (More about that in another post.)

Medical Conference

Register before October 10th and reserve your room at the beautiful Aria Resort for a special discounted room rate of only $179 plus resort fee. These rooms are regularly around $400. (You must book your room at the Aria prior to October 10th to lock in these special rates!)

Take a look at some of these videos that Greg made about Medfusion and then run over and register for the Medical Fusion Conference.

Discover all of the options available to you as a physician.

Medical Fusion isn't just another conference where you're sitting around and listening to an endless parade of speakers that lecture from behind a podium. Instead, you'll have every opportunity to talk to any speaker you're interested in learning more from. Our Accelerator Sessions are a perfect chance to make connections and deep-dive into the areas that are of interest to you.

More about our Accelerator Sessions


Cosmetic Surgeons enlist patients to fight the Botox Botax.

Cosmetic surgeons are asking for patient help to fight the Botox Botax. Here's what the ASDS (American Society for Dermatologic Surgery) is giving it's members to solicit the support of Botox consumers: Here's the form.
The U.S. Senate health care reform bill  (Patient Protection and Affordable Care Act) contains a proposed 5 percent tax on "elective cosmetic medical procedures."  While this may look like an attractive option to Senators looking for ways to pay for health care reform, we know that:
  • Cosmetic medical procedures taxes are an unreliable and risky revenue source, which has proved to be a failure at the state level;
  • A tax on cosmetic surgery discriminates against working women;
  • The definition of cosmetic procedures is arbitrary and almost impossible to administer; and
  • enforcement would necessitate review of patient medical records by tax collectors, a clear invasion of privacy.

Please enter your zip code below to be connected to an automatic email system which allows you to send a quick message to your Senator asking him/her to vote against this tax.

I've received an number of emails about this over the last 48 hours. Is anyone worried that this 'Botax' will hurt your medical spa, skin clinic or cosmetic practice?

Medical Spa MD: Plastic Surgery Practice & Expert Forums

Medical Spa MD get's a nice mention in PSP (Plastic Surgery Practice) as the Expert to Expert forum for Physicians. MAPA is also mentioned a number of times.

Frustrated by the lack of attention from many laser systems firms and after getting nowhere with the call center, some physicians have turned to airing their dissatisfaction in online public forums, and by firing off "e-mail carpet bombs" to the top executive management layer of these companies. The Web is filling up with their support horror stories.

One place to witness this in action is at, where expert-to-expert (E2E) discussions offer insight into the high levels of anger and frustration among many physicians who claim they have been left in the dust after they signed the contract to buy or lease a laser system. Names are named. Specific problem areas are cited. Company responses—and lack of response—to complaints are aired in public.

"Direct your anger at the laser companies who do not support the doctors who buy their lasers," writes one impassioned and disgruntled practitioner on Medical Spa MD's Physician Clinical Exchange forum. "By their inaction, and active blocking of 'clinical exchange,' these companies, and specifically their executives, make treatments with their lasers risky and much less effective!"

The issue is complicated by the type of clinical support requested by physicians. For example, some want to know how they can use their laser systems in procedures that would easily be considered off-label by the FDA.

Laser systems firms have to be very careful when addressing these types of support questions. Sometimes, they offer personalized support to their customers. Some firms do not address them at all, and others promote these off-label uses in unofficial and backdoor ways and then publicly refute them.

This sort of problem does not reach a flashpoint in a vacuum. The lack of quality after-sale clinical support from laser systems firms has been one of those issues in the aesthetic industry that few will openly talk about. To be fair, some laser systems vendors offer very good customer support. Others, however, offer levels of mediocrity rather than levels of excellence in this area.... Read the rest of the article.

Next Live Chat: Fractional CO2 Lasers

Fractional CO2 Laser Disccusion:

Wednesday March 11, 2009.

9 - 10 PM EST

Participate in the conversation as Fraxel, Lumenis, MiXto, Juvia, Dot, Lutronic and others (even a PreOwned Laser Dealer) try to convince MAPA Man to purchase their Fractional CO2 Laser. Fractional Erbium and Cutera Pearl Fractional will also be invited.

Chat Room

Discussions include treatment perameters, effectivness, cost, the technolgies and anything else of interest. All interested parties are invited. Reps who identify themselves and are willing to engage in open discusion are also welcome.

To participate: Click the launch window button above at the scheduled time.
Looking forward to seeing you.

Read Previous Chat Transcripts

The Medical Aesthetic Practice Association (MAPA) + Medical Spa MD.

Medical Spa MD is pleased to now be providing services to MAPA, The Medical Aesthetic Practice Association.

MAPA members have been using this site for some time to organize events and schedule chat sessions. We're happy to provide additional capabilites to MAPA by building out a portiion of the site that will allow MAPA members a single place to stay up to date.

Read the new MAPA Blog, participate in a live chat or read the transcripts, find reviews of medical spa technologies, or contact MAPA.

About MAPA from Jeffrey E. Epstein, MD:

The Medical Aesthetic Practice Association has been formed to advance the Clinical and Business practicies of Medical Aesthetics by facilitating "information exchange" among clinic owners and medical practitioners who work in large and small communities all around the world.

This organization is about taking the information we get from the laser companies, product companies, lumenaries and experts and putting it through the "real world" grinder of everyday experiences in busy clinical practices in order to perfect and polish the final informational product. We hope this will lead to safer treatments with better clinical outcomes.

The MAPA area will grow increasingly robust over the coming weeks with forums, a library and archive and additional features.

I'll note here that MAPA is an independant organization and not owned by Medical Spa MD.